China's Wanxiang wins auction for assets of battery maker A123

Chinese firm Wanxiang emerged as the winning bidder of bankrupt battery-maker A123's assets after a days long auction that lasted until nearly 4 a.m. Saturday.

The sale of A123, the recipient of a $249.1 million federal grant and tens of millions of dollars in tax credits from Michigan, has been the subject of intense political debate, with military leaders and politicians arguing that U.S.-funded technology should not be transferred to the foreign firm.

At the auction, held in Chicago, Johnson Controls Inc. of Milwaukee and NEC Corp. of Japan teamed up in an unsuccessful effort to top the bid of Wanxiang Group Corp., a Chinese auto parts maker whose North American headquarters is in Elgin, Ill. The German electronics giant Siemens AG also submitted a qualified bid at the auction.

A source close to the deal said the purchase price was about $250 million. Wanxiang was excluded from the purchase A123’s U.S. government and military contracts. Wanxiang, a unit of China's Wanxiang Group, made an offer to purchase the lithium-ion-battery maker earlier this year when a $465 million deal collapsed.

The Wanxiang purchase of A123 marks the second major foreign purchase of a U.S. battery company backed by Department of Energy funding. Ener1, a battery maker with operations in Indiana, was snapped up in another bankruptcy by Boris Zingarevich, a Russian businessman who at one time was in business with Russian Prime Minister Dmitry Medvedev.

Global competition over battery technology has significantly intensified despite the corporate bankruptcies. Just over a week ago Energy Secretary Steven Chu announced that the DOE would spend an additional $120 million to enhance battery technology at Argonne National Laboratory in suburban Lemont.

The hub is designed to build batteries that are five times more powerful at a fifth of the cost in five years using a strategy that has been compared to the Manhattan Project, which led to the first atomic bomb.


Source: WSJ & Electric Vehicle News

A123 Bankruptcy Auction Set For December 6th By Court

Ailing battery firm A123 Systems, which supplies batteries to Fisker, BMW and GM among others, could soon have a new owner after Delaware courts have imposed a deadline for bids.

Two companies vying for A123 and its assets are auto-parts maker Johnson Controls, and Chinese auto-parts maker Wanxiang Group.

Associated Press reports the new December 6 date has been set in place, in lieu of a November deadline, to allow more companies to compete for the bankrupt battery company.

Wangxiang Group is currently the leading bidder on A123. The company previously put forward a $465 million rescue deal for A123, which fell through when A123 was unable to meet some of the Chinese company's agreement criteria.

Johnson Controls then put in a debtor-in-possession loan, subsequently withdrawn to allow bidding from Wangxiang to go ahead. Johnson Controls still intends to acquire A123's automotive assets with a $125 million bid.

Wangxiang is currently seeking regulatory approval for its bid, from both the Committee of Foreign Investment in the U.S, and the Government of China.

The company is confident it will gain approval, but A123 had previously wanted an earlier bid deadline to guarantee Johnson Controls the sale--just in case the Chinese bid couldn't continue.

Meanwhile, a judge has approved a performance-based incentive plan at A123 for ten senior employees, and a retention plan of $2.4 million for 66 existing A123 employees.


Source: Green Car Reports